Coal v. Wind
It’s now cheaper to build a new wind farm than to keep a coal plant running. One might think that this would be an “irresistible force.”
But what happens when an irresistible force meets an immovable object, i.e., the fossil fuel industry’s stranglehold over our legislative process?
It’s clear that the object is not actually immovable (in fact, there actually is no such thing as an immovable object). The people of the world will not sit around and watch the planet slowly become increasingly uninhabitable.
Craig,
“There are some scenarios, in some parts of the U.S., where it is cheaper to build and operate wind and solar than keep a coal plant running,” said a Lazard banker who was involved in the report. “You have seen coal plants shutting down because of this.”
That’s what you need from an Investment analyst, really precise advice!
Irina Ivanova’s article is basically gobbledygook, employing out of context jargon to sound logical and accurate, but is basically meaningless.
Every power generating facility in the US has completely different cost factors, with wide variations notwithstanding the technology involved.
There is no “standardized” cost, such a estimate would be impossible to calculate with any degree of accuracy. Huge variations exist and such a claim could only be justified by ignoring a great many hidden costs.
What is safe to say, is Wind and Solar are still only viable if substantial government subsidies, initiatives and affirmative policies are in place. As soon as government policies change, most large scale wind or solar projects often struggle or fail.
Even in places like Texas where wind projects have enjoyed more success due to a more favorable locale, Texas has begun to regulating the wind industry, resulting in a wariness among investors.
The legendary Warren Buffett, CEO of Berkshire Hathaway, one of the largest institutions investing in Wind Farms stated in 2017, “They are building these wind farms to get the tax credit, wind farms are not sustainable without subsidies, incentives and favorable market regulations.”
According to the DOE and J.P. Morgan Chase Bank, wind farm operators nationwide have received nearly $137 billion in federal, state,local and consumer subsidies from 2000 through 2017.
Although federal subsidies make up the bulk of support, increasingly consumer price rigging has replaced government support.
The Production Tax Credit is the primary federal subsidy, which pays wind farm operators for every megawatt-hour of renewable energy they produce in their first 10 years on top of what they are paid from consumers. Initially established in 1994, the PTC provides an inflation-adjusted credit that stood at $24 per MWh in 2017, according to the latest Department of Energy market report.
By comparison, Texas paid wind operators about 55 cents per megawatt-hour under its state incentives.
However, the federal program is set to expire Dec. 31, 2019 and few expect it to be renewed in the current political climate. Once the feds go, states and local bodies will find the subterfuge more difficult to keep hidden from consumers, especially as wind farm facilities reach the end of their existence much earlier than was originally forecast.
At least 38 states, including Texas, have renewable energy standards that both help set minimum requirements for the amount of energy produced and financially support the industry.
At least a dozen of states have increased their alternative energy production goals since 2015. Vermont, Oregon, California, New York and Hawaii have committed to having more than 50 percent of their energy come from wind, solar and other forms of green energy by 2045 at the latest.
The problem is with sufficient subsidies, politicians and utilities can maintain an illusion of providing economic renewable energy. The energy produced by wind farms is not all that usable, especially at night.
In other words, a wind farm may be advertised and credited with generating X amount of power, but due to when the power was generated, a large percentage is simply dumped causing excessive stress on distribution infrastructure and short falls must still be produced by fossil fuel generation.
Having to adjust to intermittent and incomparable grid requirement, makes fossil fuel generators operate inefficiently and under very difficult conditions. This suits renewable advocates who are then able to justify claims if economic viability.
US Taxpayers paid have so far paid $17.9 billion to build transmissions lines connecting privately owned wind farms across Texas’ Midwestern wind corridor to the state-owned electric grid. Already, these lines are showing signs of excessive wear and will need to be replaced in between 30-40% of the original life expectancy.
In 20 years, Texas has added more than 23,000 megawatts of wind energy capacity, however, an analysis of wind turbine data from the U.S. Energy Information Administration shows the states turbines have an operating average of only 20 to 30% of capacity and even then are most productive at night, when unfortunately demand drops significantly.
The Texas Law Review estimates more than 29,000 wind turbines in the state will have gone out of commission between 2017 and 2027 at an average cost of more than $42,000 to tear them down and restore the land.
To be fair, some of these will be replace by bigger turbines and energy storage facilities, but nonetheless these costs were not originally contemplated so soon, and without subsidies.
A few years ago, an overly excited report state that between 14,000 and 20000 turbines had ceased to operate. The claim, made in 2014 was grossly inaccurate and mischievous.
But, in 2018 a far more accurate survey revealed the number of idled, bankrupt or abandoned turbines to be approximately 4500, with another 3000 in need of immediate replacement. In addition, the DOE estimates another 12000 are economically unproductive and would not be replaced.
Obtaining the number of actual turbines installed in the US is very difficult and takes a lot of research, (the Industry prefers to quote output) the figure appear to be around 57,600.
For a relatively new industry, these figures aren’t too bad if all the claims of improving technology were valid. Regrettably, that’s not the case. Although the technology has improved, wind and large scale solar is still very dubious economically and only survives on increasingly doubtful environmental merits.
The reason I’m surprised by Irina Ivanova’s use of quotes by a spokesperson from Lazards Bank an I’m confidant they must have been taken out of context, is such an analysis runs contrary to that of Lazards Bank Chairman Kenneth M. Jacobs, Director Jane Mendillo, or associate Sir Philip Hampton.
Still, it was a very generalized and vague comment.
Perhaps you should read the following articles to gain a better perspective:
[http://www.kallanishenergy.com/2018/11/15/doe-seeks-to-develop-future-coal-fired-power-plants/]
[https://phys.org/news/2018-11-pakistan-grain-coal-power-spree.html]
[https://www.forbes.com/sites/judeclemente/2018/11/15/global-coal-demand-increased-in-2017/#23562a8661cf]